ETH: What More Can Happen?
ETH has had a hard time of it recently. The price of ETH has continued to fall steadily since December last year, and as of March 19, 2025, it’s hovering around $1,905 USD—a steep decline from its highs above $4,000 in late 2024. One can suppose that the only good news amidst this slump is that gas prices have been quite low, something highly welcomed by most users. These reduced fees, driven by network upgrades like Dencun and the rise of Layer 2 scaling solutions, offer some relief, but they’re not enough to offset broader challenges.
Ethereum’s struggles go beyond market cycles. Layer 2 solutions, designed to enhance scalability, are increasingly cannibalizing value from the main chain. Networks like Coinbase’s Base are siphoning transaction activity and fees away from Ethereum’s Layer 1, with estimates suggesting Base alone has shaved $50 billion off ETH’s market cap. This shift dilutes ETH’s economic relevance, as L2s thrive while the base layer stagnates. Meanwhile, institutional interest in Ethereum ETFs remains tepid. BlackRock’s Ethereum ETF (ETHA), launched in 2024, has garnered $2 billion in assets under management—respectable, but a fraction of the $30 billion in its Bitcoin counterpart. Persistent outflows from spot ETH ETFs, totaling over $265 million in recent weeks, signal a lack of enthusiasm from Wall Street, further dimming ETH’s shine.
Despite this, Ethereum retains resilience. It powers DeFi and NFTs, with Layer 2 activity at all-time highs. The upcoming Pectra upgrade could bolster scalability, but sentiment on X reflects growing doubt, with some predicting a drop to $1,500 if support levels fail. For now, low gas fees and network utility keep ETH afloat, but the cannibalization by L2s and lukewarm institutional backing leave its recovery uncertain.
